Coal industry on steady decline under Trump’s leadership

New government forecast shows ongoing decline in coal's share of electric generation.

Piles of coal sit in front of Pacificorp's coal fired power plant in Castle Dale, Utah. CREDIT: George Frey/Getty Images

Coal company officials can’t stop singing the Trump administration’s praises. Murray Energy CEO Robert Murray loves President Donald Trump’s commitment to the rollback of important environmental protections. Other officials are still celebrating Trump’s November 2016 election victory, proclaiming it shows there’s life after death for the coal industry.

Coal industry executives can’t be blamed for sounding remarkably Pollyanna, even though the coal business hasn’t made a comeback with Trump as president. One of their primary goals is to restore investor confidence in their industry. That’s why they are exuding optimism, despite little data to back up their rosy predictions.

Meanwhile, newly released data shows the coal industry is doing worse today than it was when President Barack Obama was preparing to leave office in January 2017. Coal production is still on the decline. Coal-fired power plants are still closing. And Trump’s own Department of Energy doesn’t see these trends reversing anytime soon. In other words, Trump hasn’t reversed the downward financial trajectory of the industry that started years ago.

New forecasts from the Energy Department’s Energy Information Administration (EIA) show coal production will decline by 1.1 percent in 2018 and drop by another 1.8 percent in 2019. Despite an increase in coal exports, according to the report, declining domestic consumption is making it unprofitable for coal producers to keep mining.

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By next year, exports won’t be picking up the slack like they did in 2017. The EIA, in its latest Short-Term Energy Outlook released Tuesday, projects that both coal exports and domestic coal consumption will decrease in 2019.

As a generation fuel, EIA forecasts that coal’s share of U.S. electricity generation will steadily decline from 30 percent in 2017 to 28 percent in 2018 and 27 percent in 2019. In 1997, the average share of electricity generated from coal had reached 52.8 percent.

Natural gas has been the leading fuel used for electricity generation since 2015 when it surpassed coal in the generation mix. The shale gas boom started flooding the market with natural gas in the late 2000s, making it cheaper as a generation fuel source than coal.

At the same time, renewables continued to boom. In 2017, wind supplied 6.3 percent of electricity generation and utility-scale solar made up 1.3 percent. Meanwhile, 2017 was the first time a reduction in U.S. power sector carbon emissions could be attributed more to renewable energy and energy conservation than the nation switching from coal to natural gas to generate electricity.

Since 2010, at least 50,000 megawatts of coal-fired generating capacity have been retired. “Those millions of tons of lost coal production aren’t coming back. We see an additional 15,000 megawatts of coal-fired capacity closing this year, with more retirements on the horizon in coming years,” the Institute for Energy Economics and Financial Analysis (IEEFA) wrote in a report released in March.

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Speaking at an American Coal Conference in New Mexico on Monday, Luke Popovich, former vice president of communications for the National Mining Association, said “the coal industry learned there is life after death” after Trump’s surprise election victory, according to Taylor Kuykendall, a coal reporter for S&P Global Market Intelligence.

Former NMA spokesman Luke Popovich: "The coal industry learned there is life after death" after the surprise of the Trump election.

Note coal production continued to decline, power plants retired. Improvements in market largely export based and met coal increases so far.

At other events, industry officials have applauded Trump’s announcement, made on June 1, that he had ordered the Department of Energy to look into a way to prop up coal and nuclear plants. Chris Hamilton, vice president of the West Virginia Coal Association, exuded optimism upon learning that Trump and West Virginia Gov. Jim Justice (R), a coal industry magnate, were coming to the industry’s rescue.

“Without question, this is the best news in my 40-year career in the coal industry,” Hamilton said at a coal industry meeting in West Virginia. “It’s bigger than big. Never before in the history of mining has our state and federal political leadership been able to achieve the benefits to coal that are embodied in the Trump-Justice plan.”

But few people outside the coal and nuclear industries support the plan. And few experts believe that anything Trump might have up his sleeve will restore the coal industry back to its glory days.

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One idea floated by the Trump administration would be to use the Defense Production Act of 1950, enacted as a drastic national-security measure to be deployed in time of war, to prop up failing coal and nuclear power plants.

“The proposal is so nonsensical that it is uniting broad swaths of the energy industry in opposition,” IEEFA said in July report. The plan would lead to higher consumer prices and worsened public health.

The use of emergency war-time powers to save coal-fired and nuclear power plants “is ultimately a futile attempt to thwart long-term, fundamental change in U.S. energy markets that will proceed nonetheless, and to the benefit of customers everywhere,” the research and consulting firm said.

On Monday, the Sierra Club and the Environmental Defense Fund (EDF) sued the Department of Energy for its failure to hand over documents as part of a series of Freedom of Information Act requests pertaining to the Trump coal and nuclear bailout plan.

Have a problem with the Trump Administration forcing taxpayers and electricity customers to spend billions of dollars to prop up uneconomic coal/nuclear plants owned by Trump supporters? So do we! https://t.co/NhFQP9xXyy#NoCoalBailouts

“What does the Trump Administration have to hide about its abhorrent plan that would make working families pay billions to bail out fossil fuel executives?” Mary Anne Hitt, senior director of Sierra Club’s Beyond Coal campaign, said Monday in a statement.

The two environmental groups asserted that many of the nation’s financially struggling coal and nuclear plants are ready to be replaced with newer, cheaper competitors like solar, wind, and energy efficiency resources.